vote:

the presiding officer: are there any other senators wishing to vote or change their vote? if not, on this, the yeas are 95, the nays are zero. and the nomination is confirmed. under the previous order, the question occurs on the bernal nomination. all those in favor say aye. those opposed, no. the ayes appear to have it. the ayes have it. the nomination is confirmed. under the previous order, the motions to reconsider are considered made and laid on the table. the president will be immediately notified of the senate's action and the senate will resume legislative session.

the presiding officer: the senator from delaware. mr. coons: i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

the presiding officer: the senator from iowa. mr. grassley: i ask that the calling of the quorum be suspended. the presiding officer: without objection. mr. grassley: mr. president, i'd like to speak. the presiding officer: the senator from iowa. mr. grassley: we've been hearing a lot about the so-called bush tax cuts from my colleagues on the other side of the aisle. given the rhetoric being used by some on the other side to describe this tax relief, i would like to take this time to correct the record. but first during this talk about the fiscal cliff and about the tax cuts that sunset at the end of the year, all we've been hearing since the election is about what are we going to do about taxes? that's a very significant thing as a result of the last election because i think it's a foregone conclusion there's going to be

more revenue raised. but if we raise the amount of revenue that the president wants raised and raise it from the 2% that he wants to raise it from -- the wealthy -- that's only going to run the government for eight days. so what do you do the other 357 days? or if you look at the deficit, it will only take care of 7% of the $1 trillion-plus deficit that we have every year. what about the other 93%? so the point being that we can talk about taxes and taxes and taxes, but it's not going to solve the fiscal problems facing our nation. we don't have a taxing problem. we have a spending problem. and so we should have been spending the last three weeks talking about how we're going to take care of the other 93% of the problem. the president should have declared victory three weeks ago, and we wouldn't have had all this lost time between now

and right after the election. but i said i wanted to set the record straight. the tax relief reduced the -- the tax relief of 2001 and 2003 reduced the tax burden for virtually every tax-paying american. it did this through across-the-board tax rate reductions, marriage penalty relief, enhancing certain tax provisions for hardworking families such as doubling the child tax credit. since the passage of this tax relief, there's been a concerted effort by my colleagues on the other side of the aisle to distort the truth about the present tax policy of the federal government. that tax policy's been in place for the last 12 years now. they have attempted to distort the truth behind its bipartisan support, its benefits to lower-

and middle-income americans, and its fiscal and economic impact. as one of the architects of the 2001 and 2003 tax legislation, i come to the floor to correct what i believe have become three common myths about this tax relief. the first myth is that this tax relief was a partisan republican product. the second is that the tax relief was a give-away to the wealthy. and the third is that the tax relief is a primary source of our current fiscal and economic problems. first things first. we often hear that the other side divisively refer to this tax relief as the bush tax cuts. given the rhetoric on the other side, you would think that all the tax relief was forced through along party-line votes. the record proves otherwise.

the conference report to the economic growth and tax reconciliation act of 2001 passed the senate by a vote of 58-33. in all, 12 democrats voted for this legislation. senator jeffords, who later caucused with the democrats, also voted for it. as far as major pieces of legislation goes, it's difficult to find such major legislation passed with such broad support since there has been democratic control of both the senate and the white house. the president's 2009 stimulus bill is an example. only had the support of three republicans as well as the dodd-frank bill. and of course there is the health care bill, the president's signature legislation, which passed with no republican votes.

moreover, all the 2001 and 2000 tax relief was extended in 2010, just two years ago, with strong bipartisan support and signed into law by this president. at that time, two years ago, the senate vote tally was 81-19. now understand, that's got to be considered overwhelmingly bipartisan. so just two years ago we had overwhelming bipartisan support for the bush tax cuts. yet, somehow these are a partisan measure that we're dealing with. given this record, instead of calling the bush tax cuts as they are called, we really should be calling it the bipartisan tax relief. i now would like to turn to the other side's criticism of the bipartisan tax relief as, as they say, tax cuts for the

wealthy, or another way they say it is a give-away to the rich. this rhetoric demonstrates a difference in philosophy between this senator and my democratic colleagues. first of all, a reduction in tax rates is not a give-away to anyone. the income of a taxpayer earns belongs to that taxpayer. it's not something the taxpayer may keep based upon the good graces of our government. the taxpayer may not justify keeping their income. instead it should be here on us here in washington to justify taking more away from them. secondly, there is a tendency on the other side to view everything as a zero-sum game. in their mind, if someone has more, it means someone else will

have less. so i'd like to quote ronald reagan as the best example of this attitude in washington. too many people in washington -- quote -- "can't see a fat man standing beside a thin one without coming to the conclusion that the fat man got that way by taking advantage of the thin one," end of reagan quote. i believe this is what is driving the animas against the so-called wealthy on the other side. they are under the impression the wealthy got rich at the expense of someone less fortunate. the problem with this view is that in a free economy, goods and services are transferred through voluntary exchanges. both parties are better off as a result of this exchange. otherwise it wouldn't occur.

moreover, wealth is not static. it can be both created as well as destroyed. at worst, the government is a destroyer of wealth. at best, the government is a redistribute tor of wealth. it is truth force of government, the zero sum exchanges occur. it is the private sector that creates wealth through innovation and providing goods and services we need and that we want. the leadership on the other side has become fixated on redistributing the existing economic pie. i believe the better policy is to increase the size of the pie. when this occurs, no one is made better off at the expense of anyone else. the constant rhetoric of pitting american against american based

upon economic status doesn't have to be -- doesn't happen to be constructive. it also has not been constructive to accuse those of us who support the present tax policy for all americans as somehow agents for the rich, and i will soon get into discussing why that isn't true as a result of the 2001 and 2003 tax bills. i do not support tax cuts for the wealthy for the purpose of wealth redistribution. i support pro-growth policies to increase the size of the economic pie. free markets, pro-growth policies are the only proven way to improve the well-being of everybody. my objection to the other side's characteristic -- characterization of the bipartisan tax relief is not

only a philosophical one but it's a factual one. the truth is the bipartisan tax relief that was voted in 2001 made the tax code more progressive, not less. now, with all the rhetoric around here over the last five or six years, nobody believes that. i have a chart to show that. since its implementation, the share of tax burden paid by the top 20% has increased. conversely, the bottom 80% has seen their share of tax burden decrease. additionally, the percentage reductions in the average tax rate between 2000 and 2007 was the largest for lowest income groups. as you can see from this chart, there is a general trend

downward for the bottom 20% to the top 20%. the bottom 20% saw their average tax rate drop by a quarter. in other words, that 25% shown there. the top 20%, on the other hand, only saw an 11% reduction and proportionate in between. the truth about the bipartisan tax relief, apparently, has not been recognized by my colleagues on the other side. they do not like to admit this, but this must be so since they now claim to support extending 75% of that bipartisan tax relief bill. in other words, 75% of what they are condemning of the 2001 tax bill the other side wants to make permanent law, which obviously i support, too.

you would think that if it really was a tax cut for the wealthy, however, the other side would be advocating letting all of this tax relief expire. certainly, certainly you would think they would be advocating for more than half of it to be extended. to get around their seemingly contradictory position, they have stopped referring to the majority of the bipartisan relief as the bush tax cuts. that terms is now reserved only for the 25% that they wish to see expire. they now refer to the 75% not as bush tax cuts. they refer to it as middle-class tax relief. so i have news for my colleagues. the middle-class tax relief you

now claim to support is the same relief you previously demonized as tax cuts for the wealthy. finally, it has become in vogue for the other side to blame the bipartisan tax relief for everything from the federal deficit to the state of the current economy. neither are based upon fact nor sound economic reason. it is undisputed that in 2001, the congressional budget office was projecting a 10-year budget surplus of $5.6 trillion. however, as of june, 2012, c.b.o. reports show the bipartisan tax relief role in turning this projected surplus into deficits is dwarfed by other factors. this is the bush -- or this is

the 2001-2003 tax cuts. so see that smaller piece of the pie. and then let's look at what else is the justification, according to the congressional budget office. not this senator, about where the deficit came from. first off, the june c.b.o. report tells us that their budget surplus projections were incorrect. now, that happens a lot with c.b.o. i like to refer to c.b.o. around here as god because what they say goes and you have to abide by it if you don't have 60 votes, but they aren't always right so they aren't always quite god. but unlike god, c.b.o. then is not omnipotent, they do not have perfect foresight, and every

once in a while, they even make mistakes. c.b.o.'s surplus pro swrexes were based on rosy economic assumptions as well as faulty technical assumptions that did not pan out. c.b.o. failed to predict the bursting of the tech bubble, and that was -- that tech bubble was so beneficial to propping up the economy in the clinton years. c.b.o. also could not predict the 9/11, 2001 tragedy that hit new york and the pentagon, killing 3,000 americans. that 9/11 wreaked havoc on our economy, and that wasn't predictable. so add all these things up. all told, these and other economic and technical changes accounted for about $3.2 trillion. or as i show in this chart, these faulty assumptions

accounted for 27% of the change of the 2001 projections from complus to deficit. by far, the biggest reason for the change from surplus to deficit was an increase in spending. some of this spending was justified. this includes bipartisan support for increased spending to protect our nation against future terrorist attacks, but of course it has become the custom around here. we have spent and spent and spent some more. this spending not only continued but escalated with the election of president obama. his first act was to increase the deficit by $800 billion-plus through a failed stimulus package, and all this increase in spending accounts for nearly 50% of the change from surplus

to deficit. that's this part of the pie chart. so how about the tax cuts we hear so much about, we hear so much belly aching about from the other side? if you look closely at my chart, you will see that i have divided the tax relief into two slices. these two slices add up to about 24%. 11% of this, which i labeled all other taxes, primarily consist of the tax relief provided in president bush's 2008 stimulus package. president obama's 2009 stimulus and the payroll tax holiday are included here. of course, these provisions had large democratic support, as we all know. that leaves us with the 2001 and 2003 tax relief accounting for merely 12.9% of the change in the projected surplus.

but understand what other people are saying, including, i think, even the president is saying, about the reason we have this big budget deficit is because of the bush tax cuts. well, that's baloney. it's a far cry from being the driver of our deficits or even a substantial contributor. the truth is even using c.b.o.'s static scoring assumptions, tax relief did not push us into deficits. in fact, if the only change since c.b.o.'s 2001 projection had been the 2001 and 2003 tax relief, we would still be experiencing sizable surpluses each year. along with blaming the bipartisan tax relief for deficits, my colleagues on the other side have alluded to this tax relief as being the cause of our recent recession. the president even made this

claim in an ad during the presidential election. now, the exact logic of this claim escapes me. apparently, it also escaped "washington post" fact checker glenn kessler. he described the reasoning supporting such a claim as a rube goldberg phenomenon. the postwas unable -- the "post" was unable to find any academic study supporting that convoluted logic. there is good reason "the post" could not find such a study. the focus of most economic research in this area focuses the degree to which tax increases lower economic growth and tax decreases increase economic growth. there is considerable debate within this research, but it's difficult to find any suggesting that tax increases are good and

decreases are bad for the economy. now that i have explained these myths to you and hopefully corrected these myths, i hope that we have a more constructive discussion on averting this fiscal cliff. republicans have already stated they are willing to accept some new revenue. speaker boehner has put $800 billion in new revenues on the table. however, we still not have heard from any sub substantive ideas m the president or other leading democrats about cuts to spending or entitlements. we haven't even heard the president say good things about the simpson-bowles recommendations, a commission he appointed, a commission that had republicans and democrats on it, a commission that reported that had conservative republicans and liberal democrats saying we ought to do what we can to see the simpson-bowles approach

through. it would be nice to see the president endorse a recommendation of a committee he appointed that had a suggestion for taking care of this fiscal cliff problem. if he had done that two years ago, we wouldn't be debating the fiscal cliff today. so there are serious concerns on my side of the aisle that any agreement we reach will result in immediate tax hikes but promise spending -- promised spending cuts never occurred. we need more than just empty promises from the other side. the president and my colleagues on the other side of the aisle need to get serious about looking at the spending side. it's time for the president to make good on his campaign promise of supporting his words balanced approach to deficit reduction. let me repeat what i said at the beginning. all we have heard for three or four weeks now since the election is all about taxes. in fact, too often, that's what republicans are talking about,

although they have got to be considered now as a result of the election. but if we give the president everything he wants in the sense of the -- taxing the wealthy, with the figures he wants, still runs the government only for eight days. what about the other 357 days? it only takes care of 7% of the deficit problems we face year after year after year and it's going to be year after year after year into the future if we don't get something done about it. so what about the other 93%? the taxes aren't going to take care of that. you can't tax us out of this deficit problem because we have a spending problem. so if we had put as much time into the spending side of the ledger that we put into the taxing side of the ledger over the last three or four weeks, we would be well on the road and be certain to get out of here by christmas eve, which i have my

doubts that we can. i yield the floor. a senator: mr. president? the presiding officer: the senator from georgia. mr. isakson: i rise to make fewer separate stations, congressmen dayses, i ask unanimous consent the clerk be instructed to show them separately in the record. the presiding officer: without objection. mr. isakson: december of every even numbered year is a sad time. because of outcomes, time takes over, some of our members go and some company. it's important we take the time to recognize those who served so long and so well and served each of us. individuals like jon kyl of arizona, the whip for the republican minority in the united states senate.

a great american, a great arizonan who carries a tremendous burden, too. one is trying to herd cats known as the republican conference and the's is being junior senator to john mccain. jon kyl does it in the right way. he has the temperament of a leader. he adopted 38 legislative years from the georgia legislature to the united states congress. i've known a lot of whips, a lot who cracked the whip, who were ineffective and very few who were effective and jon kyl is the most effective whip i've worked with or seen. he knows the issues and the ability to communicate them. he knows the importance and how to put the party ahead of individual priorities but to keep the country first no matter what it is. one good example mr. president. we were debating the start treaty which is very important for the united states and the president was on the foreign relations committee when we had that debate. he might remember there were people concerned about the

modernization of our nuclear arsenal while we were renewing the start treaty and would what we would do while we made a new treaty in terms of modernization. it was jon kyl's leadership working with senator kerry, secretary of state clinton that enissued the 34er7 we with have the modernized nuclear force we needed to meet whatever challenge might come our way and that treaty passed in large measure because he gained assurances from the administration and those opposed without modernization and the commitment for it, it would not take place. that's not just a whip. that's a leader. that's a man who found a problem, found a solution, married the two together and we ratified a treaty, america is a safer country because of it and our nuclear arsenal is being modernized. that's what you look for in a legislator. jon kyl is a great legislator, a great whip and i want to pay

tribute to him for his service to the united states senate, the people of america and service to the people of the state of arizona. i'd like to turn to richard lugar from indiana. he's one of those rare people referred to as an institution and he is truly an institution stiewtion. six terms in 36 years in the united states senate. a candidate for president of the united states in the republican primary a number of years ago. a bipartisan man who worked with then chairman of the armed services committee sam nunn to put together the nunn-lou gather agreement which allowed us to tear apart nuclear warheads, tear down nuclear missiles and a.b.m. launchers. the reason there is not a terrorist attack using nuclear material today so far is probably more because of dick lugar and sam nunn than any two individuals in the united states. dick lugar is a man i admire greatly. i hoped when i came here i could

serve with dick lugar. that took place and the president and i have served on that committee together for four years. i've watched dick lugar during tough times, happy times, good times and challenging times. he is always even. always got an even keel, his rudder is in the water, knows where he wants to take the committee but he doesn't drive it, he leads it. one of the great negotiators of our time, dick lugar has been more to our country than anybody i can think of today. he has a legacy of supporting the state of indiana in every way you could from the school board to mayor of indianapolis to united states senator and future years a great lecturer and great leader on the national and international stage. we will miss dick lugar very much. i hope all of us will remember and learn from those things he taught us about a steady hand, good diplomacy and the importance of diplomacy over guns any day of the week. i want to turn for a second to

one other individual, a member of the democratic conference and a dear friend of mine, kent conrad from north dakota. when i came to the senate the first thing i noticed about kent conrad is how he dressed. the second thing was his dog dakota who you'll see every evening walking down the halls of the congress. a smart dog and his pet that he loves very much and his wife lucy, a great lady and leader in her own right in terms of major league baseball. but kent conrad is a very unique member of the united states senate. he has truly taken a bipartisan approach to the toughest problems we face in terms of spending, deficits and debt. it was kent conrad who was willing to help support the simpson-bowles proposal when it passed the senate and it was kent conrad who agreed to serve on simpson-bowles and come up with the recommendations they brought to us. it was kent conrad who went on the gang of six and tried to work out a tough compromise on the tough issues before us and kept conrad served as chairman of the budget committee in the senate the last four years along

with senator egg sessions he's done a great job and along with his predecessor, judd gregg, they did an even greater job to see we broad brought forward budgets and principals of spending money. kent is one of those rare leaders who finds the sweet spot. looks for the place people can find common ground. he understands the importance of our job a is the future for our children and grandchildren whether this north dakota or georgia, pennsylvania or ohio. kent conrad is a senator for all of america. he's done a tremendous job in the united states senate. i wish he and lucy and today coata the very best. lastly i want to turn to football coaches which might seem to be a quick turn when you talk about united states senators but in georgia we're having a retirement that was just announced. retirement of bill curry, the head coach of the georgia state panthers. he is a legend in our state not of his time but all time in terms of football. he played football at college park, georgia in high school and went to georgia tech when

they were in the southeastern conference. he was a small 200-pound center. went from georgia tech to the green bay packers and played in the first super bowl game as a start are senator, traded to the baltimore colts and played in the famous game when joe namath delivered victory against the colts. he went on to play for other nfl teams until he was hurt in a game on an injure caused by merlin olson. he didn't quit when his career ended in terms of playing football. he went into coaching. went back to his home alma mater georgia tech and coached as an assistant then took pepper roger's place and became the head coach and took them 0 the bowl games, took them to conference championships, was a true leader. from there he was sought out by the university of alabama, a pretty big job in the south when it comes to football. he became after bear bryant passed away and two successive coaches failed to meet the alabama standard. bill came and scoartd.

he won a s.e.c. championship, had a great career at alabama. he went from there to the university of kentucky, which had not had a winning roshed rord in nine years when bill curry showed up. he molded somebody else's recruits into a winning team with a trip to the peach bowl in atlanta, georgia. he went from there to georgia state university called and said bill curry, we're going to start an ncaa division football program, we'd like you to start from scratch. we don't have a field, don't even have a football but we have a desire. bill curry took on that challenge and in four years built a great program which he will turn over to a new coach shortly in atlanta. a program where his first year with a first timetime 2350b8 team he won six out of 11 games and and went on to have a great year and turned it over to another coach. but his legacy is not the s.e.c. championship. it's not playing in the first super bowl or playing in the famous bowl that joe namath guaranteed.

it's not what he did at georgia state. it's the fact that everywhere he went, bill curry's legacy were men who played football but learned the game of life. because he was a disciplinarian, he told people how to do things the right way, set standards for his men that last them not just for the football season but through their lifetime. there are men playing football, running banks and insurance companies, teaching today, all over america who learned from bill curry. on the occasion of his retirement at the age of 69 and the great success he's had throughout his career, i want to his pause for a moment and recognize not just his contribution to football but contribution to the lives of young men and the people he's built to make this country and our state of georgia a better state and a better country. and, mr. president, i note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

a senator: mr. president? the presiding officer: the senator from tennessee. mr. corker: i'd like to ask unanimous consent to vitiate the quorum call. the presiding officer: without objection. mr. corker: i'm here to talk about the bill before the senate, a two-year extension of the t.a.g. program. as everyone knows this will be the second two-year extension of a program put in place as an emergency measure taken during the height of the administration crisis -- financial crisis. it was also meant to end once the crisis passed. mr. president, i have exeaptionally high regard for community bankers in tennessee as i know you do in pennsylvania. they have had to "deal or no deal" with the financial crisis of 2008, the recession it left in its wake and if that wasn't bad enough, since the passage of dodd-frank they've had to deal with an onslaught of new regulations. now many of these regulations no

doubt were ill conceived and if we remember a lot of those were put in place as aspirational goals. all of them have dramatically increased the compliance burden of being a small banking institution yet none of them have been on the table to be fixed or improved by us in the senate since 2010. obviously there were a lot of reasons for this, but from the standpoint of community bankers there's no doubt this has been a shame. but i'm very hopeful, mr. president, that in the next congress we will have a meaningful dialogue about striking a better balance in terms of bank regulation, particularly as it relates to our community banks. some of what we passed in dodd-frank makes a great deal of sense, but much of it does not and it's time for to us devote energy to fixing and improving the law where the law -- where there are flaws. if we really want to help community banks, this is where we should focus our energy and i know there's a lot of bipartisan

ideas around how we can do that. i think all of us have heard from community bankers and our states about the onslaught of regulation they have, some of which was really meant to deal with some of the bigger institutions but, again, that to me is where we can really focus in a bipartisan way to give some relief to our community banks. giving out limbless deposit insurance, though, i suppose by some, some people have decided that's a consolation prize. and i hate that. that's too bad. we should fix dodd-frank if we want to help our community banks. but to to the vote in front of us is a t.a.g. extension. i want to talk a little bit about that specifically. there are a series of policy reasons why it's time to end the t.a.g. program. i will go through a couple of them here. first, the fdic insurance fund is undercapitalized.

this is a fund of reserves meant to protect taxpayers against an unexpected loss stemming from bank failures. by law, the d.i.f. is required to be at 1.35% of total outstanding deposits. it is, however, only at .35% today. i do not see the wisdom in extending insurance to $1.5 trillion in transaction deposits at a time when the deposit insurance fund is already undercapitalized. second, there is ample liquidity in our banking system as to support loan demand. in fact the ratio of loans to deposits is at historical lose. liquidity to make loans is not the problem. slow economic growth is the problem. extending insurance to keep these deposits around then fixes a problem that simply does not exist. third, the overwhelming majority of t.a.g. deposits are actual

witlywith the largest banks. some small banks have said they want an extension but this is largely not a small bank product. 71% of t.a.g. deposits are in the largest banks. 60% of t.a.g. deposits are held by just the top five banks. i do not see the wisdom in leveraging the fdic and the taxpayer to insure the deposits sitting in our country's -- the deposits that are sitting in our country's largest financial institutions. fourth, extension of the t.a.g. program raises serious moral hazard issues. it encourages large deposits in banks that may be troubled with no market discipline. moral hazard is one throughout the history of deposit insuran insurance, it's always been limited. i think washington has contributed quite enough to moral hazard problems over the last five years -- several years, and i think it's time for

us to stop. finally, if we really want to help community banks thrive and succeed, our focus should be on dialing back washington's desire to micromanage our banking institutions. the regulatory pendulum of washington trying to micromanage these institutions has absolutely gone too far and our focus should be on getting the pendulum back to a more reasonable place. extending limbless fdic insurance for -- limitless fdic insurance for these transaction deposits does not further that policy objective. in fact, it takes us in the other -- other direction. let me put it another way. how can we ever get d.c. out of the business of telling banks where and when to lend if we were having -- if we're having d.c. guarantee all of their deposits? the answer is that we cannot. so, mr. president, i'm offering a couple of amendments that help insulate the taxpayer a bit, but

in reality it's time fully end this program. but even more importantly, it's time for us as members of the banking committee to take up the real challenges still facing our financial system. mr. president, i -- i do want to say one other thing. i know that all of us are watching as -- as the president and speaker boehner and others are dealing with the fiscal issue. we call is the fiscal cliff here. and i think all of us know what we really need to do to deal with the fiscal cliff is to have a true fiscal reform package that i hope would be in the range of $4 trillion, $4.5 trillion, so we can put this issue behind us and really begin this next year with it in the rear-view mirror and our economy taking off because we've shown the world that we've actually dealt with these issues and people in our country would have the confidence to invest --

to invest here in our country because they know we in washington have been responsible in that way. one of the big discussions that's taking place right now is revenues, and, really, i think at the end of the day, we're going to come to a conclusion very soon that it's probably time for us to go ahead and rescue the 98% of the country that's been caught up in all of this. and my sense is we're going to have some resolution to that in the -- in the very near future. what i have found is, and one of the reasons that we don't have a solution, is that people on both sides of the aisle are focused over here on the revenue side, but so far there really has been almost no discussion on the entitlement reform side. and candidly, i think it's uncomfortable for many in congress and even at the white house obviously to deal with this issue. as a matter of fact, on this issue, what i would say -- and i

know there's a difference of opinion here -- here we have a country that every developed nation knows its greatest threat is our fiscal solvency. economists on both sides of the aisle have said that the greatest threat to our country is us not dealing with the fiscal solvency and the $16 trillion in debt that we have that's growing. and yet, in fairness, we have a president that so far has been willing to lay out a plan to deal with this issue. and so while it pains notice bring this up -- pains me to bring this up, because i think we as elected officials and the white house should just sit down and deal with this issue because we know it's the biggest issue our nation faces, it appears to me that it's very possible that we may move through the end of this year only dealing with rescuing the 98% of the people that have been caught up in this debate. and so there's a moment, a

moment -- i hate to use this word, but there's another moment coming which probably will force us to deal with this issue in other ways and that is the debt ceiling. and while i -- i don't think it's mature that we have to have a line in the sand to force us to sit down and deal with this issue, it is where we find ourselves in this congress and in dealing with this white house and that is needing a point of leverage to focus these discussions. so, mr. president, what i would hope is that we would sit down and we would come up with a $4 trillion, $4.5 trillion, $5 trillion package to put this behind us, one that has both revenues and entitlement reforms and a solution that, again, would put this in the rear-view mirror. but where i see this going is that it's possible that by the time year end comes, all we've done is rescued the 98% of -- of

taxpayers that have been caught in this and then moving to th the -- to the debt ceiling as the next line in the sand that's a forcing moment to cause us to deal with this issue. so i think that's where we're headed unless something happens. i hope something big happens that i can support. i will tell you this. i've been through this process. we all have. the 112th congress knows more about this fiscal issue than any congress in the history of man. we've been through two dry runs. we know what the cost of each change is. we know how much it saves congress and saves our country if we deal with these issues. mr. president, one thing i do want to say is, is i cannot support another process that leads us to another fiscal cli cliff. so, again, i hope the president and speaker boehner will come up with a solution that puts us --

puts this behind us. we all know what we need to do. what we've lacked around here is just the political courage to sit down, both sides of the aisle have issues, i understand that, but we've lacked the political courage to sit down and deal with this issue. so it appears to me again that where we may be headed is towards the end of this month rescuing the 98%, putting that issue over the side and then using the debt ceiling or the c.r. as that forcing moment to cause us to finally come to terms with this fiscal issue. and i regret that we are in a place in our country where we have to have these forcing moments but that's where i believe we're headed. and i can just say to everybody in here, what i cannot abide by, one senator, since i know that we know what all the solutions are, we know the changes that need to be made, we could sit down and go through columns on either side, revenues and -- and

changes to get us in a place where we need to be, but we haven't done it, and i'm afraid we're heading to a place where we're going to have to have another forcing moment down the road. mr. president, i thank you, and i yield the floor and i notice the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:

quorum call:

a senator: mr. president? the presiding officer: the senator from kansas. a senator: mr. president, i ask the quorum call be lifted. the presiding officer: without objection. a senator: mr. president, i ask unanimous consent to address the senate as if in morning business. the presiding officer: without objection. a senator: mr. president, thank you. in communities across our country, millions of americans unfortunately find themselves placed in danger by the very people who are supposed to love, care and protect them. mr. moran: domestic violence brings hopelessness, depression,

and fear into the lives of those who fall victim to it. i rise this evening on behalf of our victims. they are our neighbors, family members, brothers, sisters, mothers, fathers, as well as those people who are so careful in their desire to serve those who are subjected to domestic violence, to say that now, now is the time for us to send to the president for his signature a bipartisan, commonsense violence against women reauthorization act bill. we got caught in a lot of partisan bickering and we failed to do that earlier this year, and i'd like to rectify that course. each year more than 2 million women in the united states fall victim to domestic violence. in kansas, my home state, an

estimated 1 in 10 adult women are domestically abused each year. studies have shown that more than 3 million children witness domestic violence every year. all of these victims depend upon services and care provided by vawa, a grant and the funding recipients that benefit from those grants. on a single day last year, shelters and organizations in kansas that are funded in part by this legislation served more than 1,000 victims, and similar organizations around the country serve more than 67,000 victims each day. a few weeks back, i visited one such organization, kansas safe home. it's a tremendous organization that serves the greater kansas city area. i've always believed that we change the world one person at a time. and what i say in my visit to safe home was exactly that -- making the difference in a person's life each and every day one person at a time.

safe home provides more than a shelter for those needing a place to live to escape from abuse. they provide advocacy and counseling, an in-house attorney, assistance in finding a job. the agency also provides education in the community to prevent abuse -- further abuse, and we often think that it doesn't exist and yet this organization is making clear that the prevalence of domestic violence is known and combatted. each year safe home helps thousands of women and children reestablish their lives without violence. the employees and volunteers there are making that difference that is so important in the lives of so many. after my visit to safe home, a kansan post add question on my facebook wall. mr. bachmann said, if i came away from my safe home visit with any honest sense of how the current political game played in washington and the proposed

legislation compromised not only works -- not only the work of safe home does but also aggravates the conditions that breed and sustain violence and hostility against women. the question was, do we know what our failures in washington, d.c., actually cause in the lives of folks across my state and around the country? the point this constituent makes is right on. despite the important and honorable work these organizations are performing, they are faced with uncertainty regarding the levels of funding and the support they will receive. we have gambled with the well-being of countless victims of domestic violence and we've left these organizations in limbo and are unable to provide the maximum amount of care possible. none of us here, republicans or democrats, can in good consequently sheens let this continue. so the election is over. the results are in. and i'm hoping that the days of extreme partisanship that plagued the 112th congress are now behind us.

we must begin to unite as a congress and history is clear proof that we can unite over the violence against women act. the passage of violence against women act in 19 94 and its reauthorizations have been the result and demonstrate that we can have successful bipartisan, bicameral efforts. in order for us to move forward on combating domestic violence and caring for its victims, we must set aside the divisive rhetoric that has surrounded this debate. and both sides, we all want to end discrimination and agree that shelters and similar grant recipients should provide services to everybody who needs them. for anyone to suggest otherwise is not only disingenuous but, more importantly, it is a waste of time. the millions of victims who depend on the services funded by vawa serve better from us. the american people whom we are here to serve deserve better

from their representatives. it is past time for the house and senate and for the democrats and republicans to come together and approach this reauthorization as a reauthorization. it is not a piece of legislation overhauling, not a major piece of legislation to overhaul the legislation as it exists but to reauthorize the programs that are currently in existence. and we need to do so with a sense of urgency, of dedication to the cause, and a willingness to compromise. if we do this i'm confident that we can sort out the differences with respect to this bill and get it signed during this lame-duck period. i stand ready to work with my colleagues on both sides of the aisle and on both sides of this building to accomplish exactly that. the american people deserve that. the victims of domestic violence deserve that and the shelters and support organizations that karr for those victims of violence deserve that. mr. president, i yield back the balance of my time. mr. president, i notice the

absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: mr. reid: i ask that the quorum be terminated. the presiding officer: the majority leader -- the quorum -- without objection. mr. reid: i now ask unanimous consent that the senate proceed to a period of morning business with senators allowed to speak for up to ten minutes each. the presiding officer: without objection. mr. reid: i ask that the senate proceed to the following bills: calendar number 344, that's h.r. 4014, h.r. 4367, which was received from the house and is at the desk. the presiding officer: without objection, the senate will proceed to the bills e block. -- en bloc. mr. reid: mr. president, i ask unanimous consent that the bill be read three times, passed en bloc, the motion to reconsider be laid on the table on the two bills be laid upon the table

enblock, with no intervening action or debate, any related statements to these matters be placed in the record at the appropriate place as if given. the presiding officer: without objection, so ordered. mr. reid: i ask unanimous consent the senate proceed to calendar number 534. the presiding officer: the clerk will report. the clerk: calendar numbered 534, h.r. 2467, an act to take certain federal lands in monroe county, california, to the trust for the benefit of the bridge port indian colony. the presiding officer: is there okay? without objection. mr. reid: mr. president, i ask the bill be read a third time, passed, the motion to reconsider be considered made and laid on the table, that there be no intervening action or debate, that any statements relating to this be placed in the record at the appropriate place as if read. the presiding officer: without objection, so ordered. mr. reid: i now ask unanimous consent the homeland security and government affairs committee be discharged from further consideration of s. 3564. the presiding officer: the clerk will report.

the clerk: s. 3564, a bill to extend the public interest declassification act of 2000 until 2018, and for other purposes. the presiding officer: without objection, the committee is discharged. mr. reid: mr. president, i ask unanimous consent -- the presiding officer: and the senate will proceed on the matter. mr. reid: great. thank you. i ask consent that the lieberman substitute amendment be agreed to, the bill be amended -- as amended be read three times and passed, the lieberman title amendment which is at the desk be agreed to and the motion to reconsider be laid on the table with no intervening action or debate and any related statements be printed in the record as if read. the presiding officer: without objection, so ordered. mr. reid: i now ask that we proceed -- no, mr. president. i ask unanimous consent the committee on indian affairs be discharged from further consideration of h.r. 3319. the presiding officer: the clerk will report. the clerk: h.r. 3319, an act to allow the pasakayaki tribe to

require membership to be in that tribe. the presiding officer: without objection, the committee is discharged and the senate will proceed in the matter. mr. reid: i ask the bill be read a third time and passed, the motion to reconsider be laid on the table, there being no intervening action or debate and any statements relating to this matter be placed in the record as if read. the presiding officer: without objection, so ordered. mr. reid: i now ask unanimous consent the senate proceed to h.r. 3268. the presiding officer: the clerk will report. the clerk: h.r. 6328, an act to amend title 49 united states code, and so forth and for other purposes. the presiding officer: is there objection to proceeding? without objection, so ordered. mr. reid: i ask unanimous consent that a gillibrand amendment which is at the desk be agreed to, the bill as amended be read a third time and passed, the motion to reconsider be considered laid on the table, there being no intervening action or debate, any statements relating to this matter be placed in the record as if read. the presiding officer: without objection, so ordered. mr. reid: i ask unanimous consent the report to accompany calendar numbered 514, s. 76 be

printed with the changes at the desk. the presiding officer: without objection, so ordered. mr. reid: mr. president, i now ask unanimous consent that economy the senate completes its business today, it adjourn until 9:30 a.m. wednesday, september 12, 2012. following the prayer and pledge, the journal of proceedings be approved to date, morning business be deemed expired and time for the two leaders reserved for their use later in the day. following any leader remarks, the senate be in a period of morning business until 2:00 p.m. senators permitted to speak for up to ten minutes each with the first hour equally divided and controlled between the two leaders or their designees. republicans controlling the first half, democrats controlling the second half. that the previous order with respect -- be amended to occur from 11:30 until 2:00 p.m. tomorrow. i also, mr. president, ask that following morning business, the senate resume consideration of s. 3637, the t.a.g. extension legislation. the presiding officer: without objection. mr. reid: during today's session, cloture was filed on 3637. as a result, the filing deadline

for all first-degree amendments to the bill is 1:00 p.m. tomorrow. under the rule, the cloture vote will be thursday morning. if there is no further business to come before the senate, i ask that it adjourn under the previous order. the presiding officer: the senate stands adjourned until 9:30 a.m. 9:30 a.m.

[inaudible conversations] >> okay. i gather we are having a little problem with the technology

here. so, let's get on to our panel discussion moderated by nancy cook of national journal uncovers the budget and taxes. quite a superstar in our company . she is going to introduce the panelist. let me say, one change. hi cain will be speaking instead of michael devonshire. american progress. so it's all yours. >> waiting for one more person. yes. the grand entrance. thank you so much for joining us. we have a great panel with a lot of different expertise. we have anthony right here, the director of the georgetown university center on education and the work force. we have the vice-president and co-director of the economic studies program at the brookings institution. we have the center for american progress of vice-president

there. and then we have the president and ceo of the national small business association. so i thought we would just dive right in. you know, we talked a lot about the polling. and curious to know what aspect of the polling surprised all of you the most about what people are concerned about. you want to start? >> well, as in macro economist would say i found the data to be somewhat cheering. we saw little more optimism. i would love to see more. but we -- we confidence and a lot of uncertainty has been such a head wind for the economy over the past several years. and i think that we should be happy about any improvement that we see, especially with polls of consumers. at the businesses as well. just a little more confident. i think we really need that to support our economy going forward.

you know, there is this self-fulfilling, you know, cycle you can get into when it comes to confidence. people think the future will be better. there more willing to wake up and go out and spend and then there is more demand. >> does the optimism surprise in the of you? >> barely surprised with the optimism. where i was pleased is that people are starting to feel like it's going to get better for them. and that's a shift that we have seen in the second half of last year or this past year where there has been some -- a sense that the economy is getting better, but it left people behind. the people a feeling like their own economic condition of the course of the next year, the next four years is actually going to be on the rise, and that think that's an important thing for people self-confidence not just a broad sense of confidence in the economy. >> i think that's right. the confidence starts to build

on itself, especially for start-ups. that's really the key to our economy going forward, how do we get more companies to start and grow fairly rapidly. so much we are lacking on the last two years. but the country's, the confidence has been on the rise. really sense last summer, 2011 -- or 2012. and that -- when you look at that trough of confidence, it came about because of budget deal is not happening. and so i think we are in the midst of another situation not terribly unlike alomar politicians could, once again, cause this conference boost. >> that was one of the things i find really interesting. washington is so obsessed right now with the fiscal cliff, myself included. what is happening with the budget showdown.

yet they -- the polling seems to indicate that job creation and and the state of the economy remain, you know, their main concern. go ahead, todd. >> i think they go hand in hand because from a business perspective certainly, large corporations are sitting on lots of cash. they're not investing right now because they're unsure of the future, not just the economic future, but also the future of tax policy in all the rest of that. and all of that is tied in hand to hand. that is, to some degree, keeping the economy back. if we can reach some sort of a deal where we are not coming to blows over six months or year on what policy will look like for another six months, that will give us a lot of confidence and create the kind of government that people say they want. i'm not so sure there is really a bifurcation between what washington is focused on a more people said they want because i do think all of it ultimately is

about jobs and economic growth. >> i did find one thing surprising in the intensity of it. that is, behind retirement from gramm, social security, medicare , behind the next seemed to be job creation, deficit reduction was off the table. but what came in third or fourth every time, about six questions in terms of what is on people's minds, the extent to which higher education is available, and the extent to which it is relevant to the labour market, which is a different vision of higher education than is our tradition, and the other piece of it, and a section of the polling that was basically about the federal, the people who responded seem to be saying quite loudly that the federal government should have a direct

role in monitoring and driving down costs and higher education. in fact, they wanted to things. one, i think, 43 percent, and the other was 41. forty-three is bribe them, give them more money. forty-one close behind was penalize them if they raise their tuitions. what is interesting about that to me is it can next to a particular agenda in the congress and the administration which is to tie education funding for colleges to a time to completion, completion cost, and labor market outcomes. a bill sponsored by senators won an reveal does this in a fairly aggressive way. a lot of people, and there are a lot of people who are behind that agenda will take heart. >> one thing that we talked about before is whether or not

things that will get done in the second term, economic things, they will only get down if they are tied to some of the budget battles. we were talking about that previously in terms of the pell grant. do you think that is true for the policies that the president wants to enact in the second term? will they only get done if they are part of somehow tied to a these budget fights we're having? >> i don't think that's true. i think that certainly that has been the dynamic of the course of the last couple of years, but i think if you look at one area of legislation which seems to have a significant amount of momentum behind it which is not related to the budget deal, i think we're going to see that move of the first part of 2013. i mean, i think it does have a significant economic impact. the center for american progress , bring a 11 million undocumented and city economy that it could boost growth by

one half trillion. and that would be roughly about 1% of gross if we could add all that time, which is a significant amount. i think that's i am the president's agenda. congress is interested in doing it. it will be tied. >> one other thing i noticed about the education agenda. it would suggest to me that it will move. the fairly stern call for accountability connects to the budget agenda. that is, the notion that we should build transparency in the relationship between college programs and labour market outcomes, in efficiency measures. now, there is also a spending issue here because every year we have to appropriate money for the pell grant. the most visible of these, but i also noticed in political terms that this education agenda, and it is post secondary, more so than k-12.

kestrel figures in pretty heavily in one of the questions. but what struck me was, this agenda is most tightly tied to african americans and latinos, which are now the core of the democratic coalition and republicans are looking -- are cutting latinos for their own coalition. so i suspect that this spells good news for pell grants because that is the -- that is the program that is most visible and it in symbolic terms tracks most minorities and low-income kids. but it also says that we are going to get serious about transparency and regulation of cost and outcomes and higher education, which is a very big deal. >> yes. >> i am happy about the optimism. >> you're going to bring it down. >> i'm an economist. so i am actually concerned there are some critical areas that

will be left behind. in particular, housing. i think there is some good news that we don't talk a lot about when it comes to housing, and that is, housing is really affordable right now for a lot of americans. that should create access for americans. the other factors, you know, we are seeing really low rates of entry into home ownership. you know, studies suggest that it is low, even relative to ten years ago. and i think one of the key issues there is lack of access to mortgage credit. no, i don't think anybody wants to go back to the go-go days of the credit boom. a think everyone understands that there was too much, but i think, you know, there is lot of anecdotal evidence that creditworthy americans cannot get loans, and i think is very much tied to the fact that our housing finance system remains in limbo.

you know, these big institutions , fannie and freddie that buy mortgages from banks and basically, their own by the government now. everybody thinks it's a temporary situation. but, you know, nobody -- there has been no serious movement toward, you know, what to do with these guys. where should we go next? and i'm very worried. a lot of the housing instruments i talk to don't seem to be making any progress, certainly for the next year. all this attention that will be given to fiscal issues, but i think that it is very hard for lenders to make any kind of decisions about strategies or who they're going to lend to. they don't know what the rules are going to be. though have to face them in the future. >> the same concern. i think politics is always about what's going to happen next. it isn't about what needs to happen. and what is up next is the

deficit. at least the bell way, what is up next is the deficit. apparently not. i think that our political system has to find consensus wherever it can. you can't chew gum and pocket the same time. you can't do a big thing like deficit reduction and focus in on lots of other things that require time and attention. so i saw and the polling, what i saw was support for short-term stimulus, long-term deficit reduction. not so much. job creation a lot. a concern about what was being talked about, the difference between federal investment dollars or attention -- attention between the and investment agenda which was largely education and the consumption agenda which was a retirement program.

social security and medicare. all that is very real. i don't think we will grapple with that, and i don't think my own bias is that we will get a piece of the deal and then we will get a deal to make a deal. it will stay in fiscal limbo as long as possible. so the public business, we won't get on with the public business for a while. >> just jump in there. i am pro when an agreement with that, but i think it is important to recognize that in this discussion we're having about deficit reduction, major, major shift in policy is likely to happen in the united states that has not occurred since 1993. we are getting more revenue. the river -- revenue trajectories going down. currently as a result of tax cuts and weak economy. they share of gdp it is collected, the lowest rate since the 1950's. and to finally reverse that trend is a major breakthrough.

so, yes, we are talking about deficit reduction, but in the context of that we're talking about raising revenue to a level in which can at least begin to support the kinds of investment that we need to make to train our future work force and to create an environment which we can -- >> but do you think americans will remain optimistic about the state of the economy, let's say, six months or nine months from now if we have not tackle these things that we just talked about like the cost of education, the housing market, because we are figuring out some philosophical issues about taxes and spending? >> i think the economy has been growing slowly, slowly to land steadily in the absence of any movement which we have seen of the course of the last year. ..

it was helpful and market confidence in the stock market plunge and i think we have concerned that there will be points at which we can see that happen again if we fail to -- if we look like we're not -- [inaudible] key challenges. i think, you know, what happens on january 1st everyone is saying it's the cliff and somebody said to me it's not

like the zombie apocalypse happen. i think that's right in a sense. if the market confidence goes out the window and -- [inaudible] that can be damaging to our economy. >> yes. [inaudible] i think as there's going to be some deal some other deadline for another deal next year, but it's really important, i think. they not set a whole series of opportunities to have that kind of collapse again, you know, they have a couple of bites of the apple. they have to make sure whatever they come up with less for the period of time. i think that really will build confidence. the other point i wanted to come back to is the question on housing. i think very difficult to overstate the importance the housing on the overall economy. especially against the smaller businesses. startup perspective, the start-ups, because those are

companies that a lot of job creations. they, you know, grow very rapidly. sometimes growing in to large companies in just a matter of couple of years. and they're not stopping up at high rates at all right now. a big chunk is -- [inaudible] start the companies up and have the resources. if they're looking at value of the home 401(k) an calculating if they fail what do i have to fall back on. the housing market, it's a cripple effect on that new start-up creation. >> and [inaudible] the economy is i think it's going to be very hard for legislators and political people to screw it up. i think there's momentum, we have went in to a deep hole. we are coming out of the hole. coming out of the hole

everything feel like up. the deeper of the up the more up it feels. all the projections are saying we have about 142 million jobs now by 2020 most of the projections are saying we'll have 165 million jobs nap will be 23 billion new jobs, in addition to that, we get 32 million job openings from baby boom retirement. that's 55 million job openings. americans have not seen this in awhile. i think one of the interesting -- i think there's always china, europe, and the congress who can mess this up, but i think it's going to be pretty hard to stop this recovery. we have done everything we can to do it. we can probably do it again if we try hard. i think we won't succeed this time. >> we talked that brings up a

good point. we haven't talked about job creation yet and the polling shows that's a big concern for americans. particularly for the long-term unemployed who have been left behind a little bit in the economic recovery, do you feel like the president and congress is doing enough to address that problem? and what politically and realistically could be done in the next four years? yeah. >>, i mean, i think the president is committed to this, i think that he would like to see i think see unemployment insurance -- and he would like to see, if possible, the extension of the payroll tax cuts. we have at the center for progress we released a deficit and revenue plan that calls for $400 billion in short term. we think there's a need for investing in infrastructure and roads and bridges and airports, we they has to happen sometime

in the next ten or twenty years. we have this situation now with incredibly low borrowing cost and low labor cost in the construction industry and high unemployment in the construction industry. time do it is now. whether or not such a -- at least in our plan can make through the political system is another question. i'm hopeful and i think with the discussion now -- stimulus the larger the deal, the larger the total package more revenue there is. the better the app attitude. >> if i -- on the long-term unemployment i think the good news would be, i mean, there's not a lot of god news in the situation, you know, it's 40% of the unemployed -- [inaudible] the previous -- [inaudible] but i think most typical is a lot -- [inaudible] meaning it would be --

[inaudible] then, you know, the jobs will be higher. we should talk about, you know, what happens goes along the serious situation with people skills and becomes structure. in the short room supporting the man is the right thing to do. i think he has a list of great discussions. just to jump on with another i think we need to keep interest rates low. it needs to continue what it's been doing. and we need to make sure that people can access the interest rates. i think it's a big problems that millions of americans who would be able to have more money in the pocket every month to spend if they could refinance their mortgage. they haven't been able to refinance their mortgage through various reason. we have to fix that. it's a way to stimulate the economy. without spending government money. >> for small companies and want to expand with things. aren't doing the protection laws which are laws based on the sound distance plan.

virtually don't exist in today's marketplace. some banks are starting to get a back in to it. it used to be a tapeful small business. if you have a track record and a career plan you get a loan based on the ability to pursue. it's gone. and that's critical to get back in to this. they are same boat. low interest rates. they don't make a difference. >> i'm curious, totted, to ask you from the small business perspective. i feel like they are coming up a lot now as we talk about tax rates and macking sure you protect small business. do you feel the takes rate is the most crucial issue for small businesses right now. or is it things like, you know, financing, . >> rates are on the tax for small business, but i think the most important things really are having a long-term since of permanence to the code and trying to -- to simplify the code. and our own polling of small

business community, yeah, they don't like paying high tax rates. they raping as a bigger concern the burden of trying to comply with the tax code they have. so you to remember, small business people for the most part, they pay taxes at individual rates. they have these. so but they don't calculate the incomes the way individuals do. they have to deal with the business side of the tax code and pay individual tax rates ton. and they pay the taxes themselves. like most working americans have withholding and never see the tax dollars. small business people write the check and see everlast dime of it. and not only that, the tax collector for the government. they collect all the with employees and send that in. they are the only people that really see, touch, feel, implement virtually every aspect of the tax code. that's one of the reasons it's very high on the american --

[inaudible] >> think about the structurally unemployed is there may be more hope for them time. we it before. we had it especially flit 1970s what happened then was not good. people lost 30 to 40% of the income, we looked at the five years later, we lost most if not all of their benefits. that's pretty much where they stayed. or they left labor market. there was actually in smaller numbers for older people. this time out there's some hope that the depth of the recession in manufacturing in a sense, and in construction because of the tie to the housing industry and wall street that will climb out of the in a fairly robust way. all the job creation numbers show very rapid rises in jobs in manufacturing and construction in part because the hole is so deep. it's a bit of false look. it's doubtful that construction, i think, will go go back to what it was in the '90s. it was funded on funny money

from wall street. when the pieces come back, it may levin opportunity in the middle or western states and because we're more competitive on emergency nice -- energy prices or people are going to say relatively competitive on the energy price component in production and transport cost, there is, i think, reasonable evidence in getting for starting to pull in more manufacturing. we may have hit bottom in the loss of manufacturing jobs which starts way back in 1979. there's some reason for hope, i think the metaphor and the public dialogue for it is the auto bailout. there might be more policy there. i can imagine if there's an aggressive policy on manufacturing and construction, which is about constructions another word for infrastructure, then there might be some hope especially for less skilled

males. [inaudible] i'm glad you mentioned energy costs, because i think my rad the -- mid without mentioning chiement change which i think is going to be and already is a major issue for the country and the world for the world to face. it's only going grow in importance and significance. looked at the development room in potential for shale gas and shale oil, is a real it's an opportunity and challenge. it's an opportunity for significant economic growth, it's an opportunity to move away from the dirtier fossil fuels particularly natural gas and. it's a challenge because it is produce a significant amount. we have gas methane and we need

to be careful in how we harness the value of the resource so that we're not doing things that ten years from now will have to not only undo. >> it seems like the president has made it clear that climate change, immigration reform and getting a budget deal are sort of key priorities for the second term and next year. i'm just wondering what is going happen if we don't address these issues that voters in the polling say are important to them like job creation, investment, education, et. cetera. i mean, the president can only do so much before it will start the midterm cycle again. >> well, i'm hopeful we'll get some short term stimulus out of the deal i don't think i'm being too optimistic. i'm hopeful it can happen. i'm struck by the deep sense of anxiety the american people have

we see in the poll. we hear about dotely about the cost of higher education, and it's sustainability as a work force training system. i don't really see that being tackled in a comprehensive way or at least a way that measures up to the level of anxiety and the challenges we face in the political system now. and it barely -- [inaudible] the agenda what we could be seeing in the next two years in the congress. i'm concerned about that. >> yeah. >> i mean, i don't know if you were going shift to the long run issues. education question bears heavily not only on the short run challenge of dealing with the long-term unemployed but, you know, we have the -- which is disturbing which is stagnation. i mean, you know, that i heard is if you look at aged males

they're earning not only inflation adjusted terms not only have they gone anywhere in four years. they have dropped. and i just, you know, that -- not a mystery why. it's because, you know, we used to have a lot of these blue collar jobs, great benefits, great retirement benefits anne, you know, thanks to technology, it's gone. and globalization, a lot of the shops are not ground anymore, i think, you know, both anthony and ken gave reasons to be optimistic. maybe we'll see revival on manufacturing. i don't think it's going to be answered because we got to, you know, take those workers and get them more skills, not necessarily, you know, four-year college degree. take the jobs in higher part of the job situation that are being created. >> looking out further and not, you know, up to the next year. i'm talking about the next ten

years. what the economic politicians that are going have to be put in place, you know, according to what people say are important to them to makes competitive and also to keep the middle class as is that seems to be a huge point of anxiety for many americans making sure that they have that middle class to reach or to strive for. >> i had the absolute apps to that question and i would be -- i would not be sitting here right now. look, i think part of this is, yes, we have new challenges we're facing run on technological advances and global competition nap created a situation where our -- the engine of sustainable economic growth in the middle, the good middle class jobs are not as plentiful as they were once. finding a way to get them back or find a new way to create new good middle class jobs that are sustainable is the challenge we face as country. i want to say that we shouldn't

get stuck or at least my view, we shouldn't get stuck on thinking we will have to solve that whole problem right away. 2% growth makes everything look worse, you know, things look a lot worse. if we were to create the command that give small business start investing again that would get construction and housing go, that would get the young people coming in to the work force and employment seeing reasonable growth 3.5% growth, the challenges seem more solvable. and i think that we often get lost in the hard challenges of our long run future economic growth when some of the short run challenges are not that exacted. if we were to make the kinds of infrastructure investment we need, if we were do to scare do the kinds of things in education that we need to boost growth in relative short term, our long-term challenges will be

easier. i have, you know, getting immigration reform right, especially from high-tech start-up perspective if you look at the companies i talk about before the new start-ups that grow rapidly. a fairly high percentage are started by individuals who are either themselves imgrants -- immigrants to the united states or first or sec generation of imgrants. immigrantses. we have a advantage in our university system. people want to come to the united states to get education. we have to make sure we keep them here. those are folks that are entrepreneurial, and that's what the key to our success as a country economically because of our nation of immigrants. people who are willing to pick up and go somewhere else are by nature more risk taking in entrepreneurial than other people. it's one of the things that

makes our country stand out in the world. we have to continue to capture that. >> the demand growth demand that is job growth -- forgives all sins. it will paper over all the other problems create a certain amount of labor scarsty. we have underproducing postsecondary talent in america since most people track this since about 1983. and as a result of that nonstop hiring. people were substituting baccalaureate degrees and certificate for b. a. and assume some success they want more -- employers want more skill put in better skill output. but in the end, if the jobs are there, you're in business. >> jack? >> i think the short run needs to be a priority. i don't disagree with that. i think the education issues are vast, and i think the people -- and that can mean that, you

know, the poll numbers need to be screaming this out. i just think, you know, it's just that vast number of peoples in our do to scare do list talked about affordability when it comes to education. >> do you think there's promise there. all the online stuff. the massive open online hold a lot of promise. a lot we need do to figure it out. it's not just affordability. we need more flexible college education. and we need to broaden opportunities for the nonuniversities crowd so i think there's a lot on the to do list and we don't exactly, you know, know what needs to be cone. it's not just a, you know, a situation like short run where we know it needs to be done and needs do it. we need to figure it out. we can ignore the issue. >> that's great. and one last thing then we're going move to another piece of the program. let's say you're a president in

2016 what is the first thing you tackle? todd you get to go first. in the hot seat. >> it hasn't been done, i think -- [inaudible] really i think it's so crucial to figure out how to unleash job growth. >> climb change. climate change. i think it needs to be changed. i'm optimistic we are making progress. i don't think we are going get a national bill to deal with climate change. long term deficit reduction and immigration reform once we if we can get past all of that, we

could have a serious conversation about other things. >> that's great. >> we're going to stay here and have a quick welcome from josslin from fti. she's going talk to us more about the audience bowling. she's coming? and then once we're done with the polling we're going take questions from the audience. >> thank you for being here. and thank you for dealing with our technical difficulties. hopefully we're in the clear now. as you can see, it was the first poll question i mentioned, so again, phones and computers if they are dead, you can text or tweet your responses. and the first question, as you can see as you heard ed rhode i speak about before. to our nation's challenges and think they we will in fact

overcome the obstacles we have in the past. so now we can turn to you ask and how important do you think comprise is? scroll over to the next side. there we go. that has the text and twitter information on how you cast your vote. so please go ahead and text chevre code you would select for your response and you text that to 22-333 or tweet your answer and if you just tweet it to. go ahead and start your voting and as you can see, the screen will respond accordingly. the three responses so you to choose from are very important, there must be comprise in the next four years, and there must be more than there has been in the past.

do you think it's somewhat importance. things will stay the same and they will exproafer come the challenges. or do you think it's not important comprise not necessary to to deal with the current challenges facing the u.s.? ..

what kind of role the u.s. president should take in terms of gory realistic short-term approach to facing the challenges were a long-term visionary approach, where the focus is on the future and where we are going in the next 10 to 20 years. so in general, which of the following approaches to governing do you think a u.s. presidential candidate should take? the next screen here will see two options. then to our poll question. should a u.s. president take a practical approach in difficult times addressing near-term challenges qwerty think a president should take a visionary approach focusing on long-term goals for a future in not losing that perspective of where we want to go to. once again, go ahead and tax to 22333 which you agree with or you can tweet to the code they

are. we will be interested to see if responses matter of public opinion poll where he found most americans prefer obama take a visionary long-term approach although a fair sized minority, about the 44% range felt that obstacles to be an important focus for our nation. so it looks like once again were markedly closed to a national poll was 67% of our audience in the room and online voting for a visionary approach focusing on long-term goals for the future of the country instead of the short-term perspective on the near-term object is. this would be another good thing for elected officials to keep in mind as they face the budget as well as our long-term goals and investment in the future of the country visiting a call for participating. apologies for technical difficulties. i hope you now are armed with

lots of questions for a great panel here. alternate back over. >> will just take a couple questions. we have a few minutes. here's the microphone right here. >> -- with george washington university. at three short questions analogy will pick the one you want to answer, which is i can't remember the last time i read a serious policy article that mentioned the labor department other than the numbers that came out today. here we've had really high unemployment and where is the labor department and the president's policy approach and what should it be? that's number one. number two is good decisions are good statistics on federal

statistics drive macroeconomic policy, lots of things. what are the short-term improvements that could be made that would help me to better policy? the third question is, should the u.s. have an explicit competitiveness strategy? and this has ignored explicit. we talk about competitiveness. we have a macroeconomic -- the council of economic advisers, people like karen, competitive strategies that something focused on institutionally. should either -- should there be one click taxonomists are question quiet >> whichever one you want.

[inaudible] in a reasonable way, in a consistent way. we would have a change of administration. also by definition of changes in strategy might be quite radical, by definition isn't a strategy. i like the idea of it on the conceptual basis, but i don't think practically our system is set up. >> , labor question part, one statistic that brings your point home to me that the comprehension peaked in 1979. it was the core of our labor market policy response to

recession slow growth. if we are funding it at the same level now as it did then at its peak, the program would be $25 billion. the workforce investment act, which is grandson i think, grandchild is funded as 4.6 billion. so what happened in between is the workforce development strategy shifted from the labor department to the education department, i.e. community colleges so that if a human can development policy. it brilliantly emphasizes skill development, which i think is the last and to keep the labor department out of this business. in the end, although in the intimacy wise, the one thing we

learned after 20 years of workforce development for training policy with that second chance system is in the end is really the first chance that counts. the mainstream education system, basically for years and two years that are doing not work. >> i'll take the data. i had an unfair advantage for those with andrea. what i want thoughtless and outstanding data on the returns it is different education or college degrees. 18 euros when they are thinking about where to invest or displace 35 euros can see what sorts of programs would most benefit them. more generally three things about data and one is please do

not cut the money for data more than we have because really that factor has been under a lot of strain and we do need data to figure out the going on in the economy and evaluate the options we have. to calm him we need better measures, particularly financial risk. my former life before i came to brookings has on the federal reserve board. going into the financial crisis if we had understood the risk people were taking, the world could be a different place. the more data of what's going on in different. the one thing we can see in the next two years if states piloting different programs to help the long-term unemployed and we need to assess what's good and develop best practices. >> at this point we should give

full disclosure than that uncle was president in johnson's secretary of labor conservative family interest in the labor department and labor movement. my hope and desire is the political systems, we have too forced back onto the agenda that the work of the organized labor in the cause of american workers has been shifted toward the emphasis on job creators in leaders. i'd like to see a shift that balance back more unrecognized by way of creating economic growth, not just employers and employees. if the comment i said i is for american progress which is not a labor organization obviously but to push this agenda cannot be but only up to organized labor to be making the arguments.

>> yes, talking about entrepreneurialism be in the job engine of the economy, high d.c. health care policy act during into that? is a bay area right now >> that's a great question. >> over the last 15 years has seen dramatic clients in the small company that offers to the employee. the numbers are dropping coverage. what we've seen this company is organizing themselves the idea of attracting employees who don't require, how spousal coverage, younger workers. so what you're seeing is not dropping, but there is a turn in

the nature. but that distorts labor markets. you're looking for part-time. it isn't in any way an efficient way allocating labor. in that sense it surely is as you go forward with health insurance changes over the next two or three years is really not clear honestly how that's going to take out because there is a change in what we have to do with 50 employees and over. for the companies smaller than not, they couldn't terms of the labor market improved the situation because atla everyone will have coverage and not have to tailor their practices around that. on the other hand, the employee mark is potentially the effect for many companies and those

companies that have the most jobs are growing companies. are they going to hit a wall at some point? >> i think we have time for one or two more questions. >> yes, i am perry stern. thank you. and your mention of her. when enterprises become more competitive to get closer to the customers and typically that means splitting the company out and having a strong leader in charge of figuring out what business they had to be in. in the area of education, the most effective education this one is close to the labor market, with the customers, the

employer and educators continually ask employers what kind of skills you need to have in this particular region go. typically that requires decentralization. but yeah, we're talking about centralized issues like that, where we know the best strategy for education is to be in an environment where the education is going. those jobs on the pipeline. so tell us the more about how the socialization first is decentralization will play out to improve jobs in the country. >> relationship returning education labor markets i think for efficiency sake, 18 full employment regime which we do

with all the time, which is the is the transcript data in a wage records to help people and my biases they should be part of a mandatory course of high school and college to get people financial literacy because their make the biggest investment in their lives and tell them something about career paths. you need to be able to say that a given program, not an institution and degree level is the major people mean to give students information or they choose to major in college or try to get a certificate about what happened to everybody else who got the certificate, industry certification in terms of one's, how employable he became done with their earnings were. you can then if you want to

fancying anti-vicki fulham play that regulation for for-profit colleges. there comes a thing but can't figure out quite yet in the race record data because people don't work in industries. so i think that information system has to be essentially national because of the 30 to 935% of bachelors degrees or better working in a state where they didn't get their degree. so for certificates and some other education instruments or rewards, the local or state data works, but there are risks, too. their agreements in place among all 50s d.c. transfer data back and forth their majors if they want to. >> the decentralization plan is a really important one. part of the solution -- it kills me every time you hear a ceo

said i can't find the workers they need. that's why not hiring because i get a percent or 7% payments. what the heck is going on. i don't doubt its true purpose solution as we need some way to an enterprise work on a corporate involvement in community colleges and why not because we don't hear these guys saying that. they're getting the message through of what they need. >> we have a proposal mini that touches on some of this company called to radically boost use of the partnership model that a lot of european countries, particularly in germany have been very successful in training the workforce and advanced manufacturing area. we'd like to push areas going to

united states, health care and health care i.t. is an area growing in terms of job growth, but has very low formalized training that you bring enough people in. we are calling for a million of amidships next year. so that is trying to find ways to match directly what employers are looking for but the skills training sets. the >> that's great. thank you so much, everyone. i think jocelyn is going to, up. >> hi, everybody. but that we will consider session this morning. went to thank you all for attending and asking such great questions of voting in our pools and also to our panelists have done a great job having a dialogue here with us in

engaging with us on some important issues facing our country. to thank you all again and hope to see you at the next release. thank you. [applause] >> domestic spending cuts on the table for fiscal cliff talks. two different perspectives for you. james capretta, senior fellow

bookings institution, codirector on senior families and james capretta come for ethics and public policy center and visiting scholar at aei. let me begin with you. are these potential cuts under sequestration devastating are manageable? >> somewhere in between. they are not a good idea. they would be very deep cuts. in a percent cut across the board is a very significant one-time cut for any program to sustain in an immediate year. here they are not a good idea. to be the end of the world? no. >> host: what you mean by that? >> guest: downsizing in terms of the domestic accounts. so fewer services provided. reduced federal employees, grant programs would take a haircut of 5%, 10%. david downsizing of services by the federal government. but the economy would go on and

the government would go on in the public would still continue to get by in large served. >> host: can agencies manage this? castaways managed in the past. none of this size. this would be the biggest to my knowledge we have had other one-time cut across the board but this. so don't get me wrong. i'm against its allies sequester to occur. should target cuts in programs that are rational and thought through. posted there should be spending cuts, but thought out once. >> guest: absolutely. >> host: is sequestration happens is that devastating? >> guest: i agree with what jim just said. it's a percent cut. that's serious to in a stamina battery across the board as the sad and not taking better programs versus the worst ones and choosing wisely. the other thing i would add is

on top of some cuts the authority enacted. a lot of people don't understand as part of the budget control act, the law passed in 20 lated as part of the debt ceiling for that year, we are to cut spending across-the-board cut in, discretionary spending across the board by 7% or so. so layered new cuts on top of the ones already enacted, the total cut is more like 15% and that gets to be quite devastating. >> host: james capretta, these are manageable, time goes on. agencies figure it out. do you agree? >> guest: isn't half-empty or not full. it's like hurricane sandy, not like goodie in nuclear weapons. it's very serious stuff. the worst thing is that poorly

done. it was never intended to be a crate of cutting spending. with an enforcement mechanism, a disciplinary measure on the congress and white house to make sure they got something done before 2013 began. everybody thought that this doomsday scenario in front of them, they will surely not a budget deal and it probably still will. that was its purpose. its purpose is not to cut government spending. >> host: let's look at programs that get cut. national institute of health, 2.5 billion. customs and border patrol, wic program by federal courts, national parks. what do you make of those numbers? >> guest: shows are pretty big numbers. absolute numbers shuffling a lot of people.

when we talk about millions and billions, jim and i both served in government and we know what happens when you do with members of that size. telling people it's about an 8% cut for 15% if you talk about what authority occurred as a better sense. so whatever program that is, it's going to be reduced. so whether it's money for the nih as you said, which has done research on cancer and alzheimer's and diabetes and other chronic diseases will be doing less research. if it's the fbi or border patrol people, there'll be less law enforcement. there's going to be less money for housing assistance and for childcare and for head start. it's going to be fewer teachers. a lot of things will happen. >> host: should there be any further cuts? >> guest: absolutely.

i believe we have enormous deficits going forward. what we need is a balance of spending cut of revenue increases. given that we party has been in cuts, i agree with the administration's focus on what's dissenting on the revenue side. but going forward, the big items in the budget, the ones causing the problems are not these little programs threaten great now. they are big programs like medicare and social security. >> host: speaking to domestic spending, should there be any work has to domestic spending? >> guest: i would never say there should never been in archives. they should be carefully chosen in this particular part of the budget is only about 18% of the total has already taken a very big hit and miss the part of a budget where we invested research will invest in

education, where we invest in infrastructure. so i don't think that's the best place to cut. >> host: i'll get to you, james capretta come in just a second. education, would be the impact of sequestration on education do you think? >> guest: most education spending is paid for by state and local governments. the part paid for by the federal government would be that it's very hard. so there it be to need because of less grants in aid by the federal government to the states, less money for teachers and school server in advantaged student. there'd be less money for special education for kids with handicaps or disabilities. there'd be less funny for a variety of things of that sort. >> host: james capretta, i know you think the cuts are too deep, but where can you cut

across her education? >> guest: i'm not sure i would use the word two d. i think they are indiscriminate. there's a lot of room to cut the budget. there's been a relatively modest cut already offloaded very high base. there's a very large run-up on this portion of the budget over the last 12 years. 2,002,002, the real increase in spending at domestic appropriations was 40%. there's been a steady rise including education, health care, infrastructure across the board. programs have been elevated to others for them to retrench a little good without doing a lot of damage. in the education space, the program says bill indicated are basically federal programs with state and local governments. there is no evidence that much of the spending had any positive impact on educational

achievement at the state and local level. as we've been doing this now for 30, 40 years. lots of studies have shown the federal government is largely about it. it's a very small portion of the educational budget. it's increase substantially at the federal level, confusing political accountability. education is an incredibly important issue, but has to be handled at the state and local level. the federal government pulls back, it could aid the school system and local level that there's much more political accountability. they have to decide how much they're going to invest. >> host: and move on on to public safety. james capretta, how much can they cut their quakes >> guest: public safety is an important role the federal level. we think that border control and the fbi and administration justice department. again, most crime-fighting is that the state and local level,

not the federal level. however, i don't think there's that much room. like anything else or server consolidation, overhead removal. if i were to cut this year the budget to be focusing on things like reducing the workforce, consolidating programs to put it is. gao has done justice. i look at low performing programs. there's a number of evaluations of programs that say are they actually achieving results are intended to do to achieve in many studies have been done showing that programs don't do anything in terms of delivering public service. so i think those are the areas i focus the attention on. this antique has achieved. >> host: senator coburn had to report the papers last week's about homeland security grants that the land since the 9/11 attacks. you're looking at cities that

have made a plausible scenarios for terrorist attacks. brenda cut? >> guest: i'm not an expert in the homeland security area, but i'm agree that when the government gives out grants like this, there's lots of room for abuse in made-up roles and responsibilities to get federal money. i think that's taken place to some extent and i would make a hard look at cutting up that. >> host: what are you hearing here? >> guest: no one can disagree with the idea we had to make sure the government has low performing programs. i give the kurnit hard remarks on worrying about that. they have their whole program in place to evaluate programs and where the evidence suggests they are not working, they are trying to cut back or roeser from the programs. let me give you an example. the head start program is a

popular program that uses federal money to serve three and four year old kids from poor families and help them get ready for school. early childhood education has long been a fairly effective way to help kids succeed. however, the current head start program is not always operating up to snuff. in fact, they're some evaluations that show there's enough head start centers that are not doing well, that they need to be closed down at the money needs to be competed. the administration is doing that now. i think what gemini are both saying is it's the indiscriminate nature of these cuts is wrong. i met disagree with him a little bit on the notion that were spending too much money on this part of the federal government. if you look at the proportion of money were devoting to these

programs as a proportion of gdp at the size of our economy, taking into account population growth and everything that's happened over the last 40 years, they're headed terser lowest level under record. this is not the way you grow a strong nation is by cutting education and research and infrastructure in these kinds of programs. >> host: we are talking about domestic spending cuts. the cabana table if sequestration happens. coming to a deal to avoid spending cuts. any deal would contain cuts to domestic spending as well. that means as we've talked about, education, public safety, possibly health care, federal government research, et cetera. george, springfield, illinois, independent color. go ahead. >> caller: good morning. i have a two-part question. number one, which you explain to an illiterate individual like

myself but baseline budgeting as, define it. and then, the second part is how can one, to commit three, 4% whatever increase in money available to a department be considered a cut? thank you. >> host: okay, jim capretta. >> guest: the budget office and the agencies to calculate budget projections to an estimate of what the budget will look like next year and assuming that current law for programs automatically crowned committing fix social security and medicare. they assume from domestic accounts were talking about this morning that they will grow with inflation. they assume an increase of automatically 2% to 3% is going to occur to key programs in line with inflation. the ministry cut against the inflated these fine. they say if you cut below the

level, you're making about cutting the program. so for instance, if a program is going to grow under the baseline by 3% in instead rose by only 2% in the washington parliament that is considered a cut in for a lot of americans a favor to second, still grew by 2%. that's what washington views things. >> host: grace on twitter says cuts authority been made. they should be no mark has to domestic spending, only military cuts. had he responded respond to that one? >> guest: that's actually not true. between 1989 and 2008, the domestic accounts as a percentage of gdp was about 3.6% on average for the two decade. here's would have a major productivity stimulants and partly through large increases in spending that occurred in 2009 and 2010. president obama came into office and increase the budget substantially. 24% over a two-year period.

there's been a major run up in this programs. you can do retrenchment back to to decimate level without any damage whatsoever. >> guest: on this last point, a run-up that shouldn't just alluded to was due to the recovery at. another was, because we were in a recession and acted a stimulus plan, some of these programs were bumped up a mistake that that will go away partly because the recovery act is going to expire and partly because as i said earlier, we've already had some cuts which take the form of putting hard caps on how much congress can appropriate for this budget. does hardcastle paid over the next decade. those are things and acted. i agree with the caller who said we've done a lot of cutting and the heart of the budget already. that doesn't mean we don't have

spending cuts elsewhere. i think this is the wrong place to do this. >> host: on twitter, the democrats won't cut the hard part that needs cutting. >> guest: there's some truth to that because as i said before the drivers of our deficit is by social security, medicare, medicaid. these are 40% of the budget or more right now and growing very, very rapidly, prairie because the elderly population is growing by the because health care cost per person cook very rapidly. so if the public wants less medicare, less social security, less medicaid which pays for nursing home care as well as for health care for low-income families, fine. were going to need to go there. we cannot continue to squeeze money out of the small part of the budget called domestic

discretionary program. >> host: the safety net programs make up 13% of the overall budget. the other portion of that pie is 7% of that portion of benefits for federal retirees and veterans from a 2% transportation infrastructure. 2% for education, 2% for science and medical research than 1% for nonsecurity international spending. i assume that means foreign aid. for% for the programs. democrat caller, go ahead. >> i have a two-part question. i was wondering, for one, i'll be retiring here and another 12 years, but i'm not going to have social security until the age of 70. i am 50 now. i was wondering right now for us to lose my job for some unforeseen reason, i will lose

my benefits. at the option is employed to keep my benefits at $800 cost. when the senators and congressmen stepped out of their positions, they still have their insurance. the second per question i'm posing as i believe boca to 33% pay raise every year. i've never seen in my lifetime ban sought by. that's something that could be possibly done? >> guest: i assume what you're talking about is if you lose your job you that these are benefits. you mean primarily health care benefits and you are right. you have three sons under the affordable character and is implemented in 2014 that would enable you to go one and exchange them by a group plan. if your income is so come he would get a subsidy from the government to buy a up to

moderate level. on the point of pay raises, duke be interested to know there's a bill on the congress that says no budget, no pay. in other words, if congress can't get its act together and fix this problem they shouldn't get paid. not surprisingly the bill has not been in that day. but it's interesting that these there's been a group in the congress is unwilling to put the legislation forward in response to your and many others comments. >> host: junker prater come a treat for you. cut in the workforce means people get laid off. is it a good idea to live during high in the planet? why not wait? >> guest: we need to restrain spending at the federal level. an interesting study recently showed if you look at the productivity of the federal workforce -- i've been a worker

most of my career. i admire the workforce and there's many things being done well. we need to give more i would just like the private sector. as part of making the federal government more efficient, of course that will be looking at downsizing the size of the federal workforce. that doesn't mean it's necessarily bad. it could mean the federal deficit is produced and that frees up more room for the private economy to be optimized. you can't look at this to prop up employment. i don't think that's a good way to look at the economy and economic growth. >> host: independent caller, hi, brenda. >> guest: >> caller: regarding the congress expenditures as, money magazine in the 1990s did an article about that where they had at that time went from less than a billion to operating on two or 3 billion they found for

people to work for one congressman all they did was get them reelected another uses our are a taxpayer dollar, which it wasn't meant for. along with that, which is what i was calling about a social security federal employees get on mrs. and mrs. been going on for 40 years i know. i don't understand if they're getting a salary, and our salary, why should they get bonuses? >> guest: i think bonuses are not such a bad idea to the user's bonuses to give and it inspect. you don't necessarily get a bonus automatically. to get a bonus if you've done something to improve service or be in a highly productive employee. i think, by the way, it is worth pointing out that the social

security administrative systems would be affect by this sequestered. not to benefits, not the check that goes out to retired citizens, but the administrative expenses in the social security system which is quiet though considering the job they have. but there would be slower processing of initial applications. slower processing of claims for disability insurance. i think we would not be well advised to not give incentives to federal workers doing this kind of jobs to be the best that they can be. >> host: republican caller. >> caller: this is schmidt e. from farmington, new mexico. what a wonderful time to get in. you are so outdated is incredible. if anybody wants to know how much money we waste, we just recently had a guy in the northwest who won a lottery,

took him $800,000 cash and went to his local food stamp office, told them he wanted money and he said he still qualified for food stamps. these people are nuts. the federal government has a minimum -- and i've worked with the utility industry promotion psalmist famous working for government at least 40%, to many people, then they need to do this job. it's absolutely incredible. they're not cutting a current team. they're cutting the the growth of government. congress doesn't vote themselves raises. they get automatic raises unless somebody has the to stand up and say we don't need to have a raise this year. they haven't done that since they put that into effect. they don't vote anymore. >> host: let's get a response. >> guest: i'm sorry i don't

agree with all of your taxpayer. one can find instances of fraud and waste in the federal government in any organization. so, i'm going to once again say we need to do a better job. there's a lot of money being allocated to buy this program integrity, man must make sure the money is spent for what it was intended for and not misused in any way. let's crack down on fraud where it exists because there will be citizens to try to game the system and sometimes they will succeed. that doesn't mean that the entire system is therefore bad and should be cut way, way back. >> host: eye for democrats, to, virginia. >> caller: how you doing this morning. appreciate you taking my call.

i don't see why the highway department can add a few more cents tax to the price of fuel and make jobs of that. just running the whole department on what they can collect. just go there've been proposals to raise the gas tax, which is what the caller is talking about to pay for the highway program and that is not a popular provision. the price of gas is a lot of voters who watched that at the pump every day or every week when they go to the pumps. it's not a popular item for a politician. the gas tax is more heavy ending. i would say we need to move towards a six-time winner week at towards energy independence

and there's lots of efforts by the administration ideas talked on the campaign to do that. i've generally supported by moving all fronts in that area. that's really where we need to go. >> host: i want to show our viewers what to administration republicans are doing to avoid sequestration, spending cuts on the domestic side. the white house says that when you do for a sequestration in multiyear stimulus package. the figure is that 50 billion. jim capretta, is that a good idea? >> guest: aim for deferring to have the congress or by the multiyear budget. how that is done is a larger debate, both in his entitlement spending. as where the action is, it's true that this portion of the budget could take some cuts. we should do it in a careful way. we shouldn't do an indiscriminate sequestered. i agree with all that.

the budget framework needs to take on the growing cost of medicare and medicaid and social security. those are the drivers of the deficit. if we can as part of avoiding a fiscal cliff put in place a framework for that is still the seriously, i'd be all for it. >> host: what about adding the stimulus money? >> guest: i don't think the previous stimulus was well done. the previous stimulus was too heavy and government spending and not enough on reducing the tax federal government and putting it in the household. i am for allowing the payroll tax reduction occurred in 2011 and 2012. i am for continuing that. i put money in the pockets of working families. i think that could help the economy. i'm very dubious however that more spending through measures in 2000 would do much good.

i think he did much good must program. >> guest: i think a one-year deferral would be okay. the rest of the package looked good. i think of the stimulus idea, the $50 billion he mentioned, this is a great idea and the reason is because we still have an unemployment rate is 7.7%, which is a very high by historical standards. the recovery is very fragile. if we service in revenues and cutting spending right now in a major way to do it in 2013 is supposed to doing it but gradually entering the economy a chance to recover, that's not going to be good. i think we have to remember it's not just our debt and deficits. it's the economy. we want to create jobs. we don't want to ratchet back on but the government is doing in

the short run. you want to do that in the longer run. that doesn't mean you want to do something big in 2013. just go to avoid sequestration, house republicans has put forth a plan to his proposal including mandatory savings. do you agree, disagree? >> guest: the big issue is the overall balance of the package not a specific number for anyone so that. i think if republicans agree to something similar to what the president asked for in the revenue front, which is 1.6 trillion in new revenues over the next decade, democrats will be willing to go along with spending cuts and the president has argued that $350 billion on

the table. so i think it's got to be a package that. >> host: what do you think of the republican proposal? yesterday should be more aggressive on the entitlement reform side. probably because of the election did not ask in as much as they showed. the real problem is in the operations of medicare and medicaid, how they fit in the larger health system is a much bigger issue. those programs have big problems associated with excessive cost growth related to the waste that occurs in medical delivery generally. there's an objection of the system based on price sensitivity. that is a key ingredient to getting entitlement programs. it's been proposed and discussed in the campaign.

it's called premium support. to think in general that's where we need to go as part of a reform plan. the president doesn't like that approach of course. how you reform is just as important as reforming them. so this is a big, big issue and it's going to have to be a big part of the budget negotiation. >> host: independent caller. hi cometh samuel. you're on the air. going once, going twice. republican collar. >> caller: i want to say since he batted social security, keep them in your site from social security, which means these people will take money out of the bank and expect it to be compensated at a later date. this is a very bad program to take that money out of paychecks steal from social security. social security is bleeding.

they can't steal it anymore or the united nations, which i find if you can get your health care to that man who called in. you can get your health care from the subsidies are the exchanges. for a second, the article the tribune review, maybe c-span can get hammons. he's at the cato institute health policy. >> host: it had them on many times, regina. >> caller: he says changes will cause the department estimates that even the subsidies, premiums could rise by roughly 25%. all is doing is making people go away from states where they can't afford these costs. how about if we go out to the united nations and get them out of our budget? >> host: okay. isabel sawhill. >> guest: your first point is

about social security, shouldn't touch it. i assume what she's talking about is that there isn't earmarked tax called the payroll tax that funds social security and she thinks the rest of government is stealing some of that money or using some of that money inappropriately. many people make that argument. you're in good company. i don't happen to agree with that perspective because this is just like saying that if a household had two different accounts, one of hunt only spent on retirement needs and another on everything else, money is fungible so it all comes out in the wash. that's a more complicated discussion. it's happy to health care premiums, i simply don't know what your evidence is that the affordable care act is going to cause an increase in premiums.

jim knows more about this than i do, but there are portions of the law that limit how much the money can go for anything other than actual care. if we think more people are going to seek care was the affordable care act goes into effect, i suppose that could drive up cost. but there's nothing in the plot itself it says that it's going happen. >> guest: it's almost a certainty they will quote in the exchanges. the reason is the law and pose a reading band system of a premiums can be charged by insurance companies. many people in the individual small group market today get insurance on the road for a small business tend to be younger and relatively healthy. as a result of the new rules come into play, those people that have insurance today are going to see them very substantial as michael indicated that column, substantial

increases on the order of 25%, 35%, 40%. ask an executive that that's going to have to do a play that's true. postcode mary, mount pleasant, south carolina. >> caller: hi, good morning. i think my opinion is this, i don't know why, you know, republicans want to pick up the so-called entitlement programs. i don't think that's the problem and i know you guys mentioned something about the stimulus. well, the president failed, but the problem is they got the money and they didn't start learning it back to us. they talk about government, but if you work for government we wouldn't have anything. i think we should support creating a government to have a government run big.

that way everybody can have the right way. they're trying to sell this idea about people satisfied with a handout that the government that does not to work. you have to have a decent job. he screwed the country up so bad not the entitlement program. it's those unnecessary wars that all the money was spent on, independent contractor connected through. >> guest: i disagree with the callers point of view could in 1972 the federal government spent roughly 4.4% of gdp in the major entitlement programs, social security, medicare, medicaid. that has risen in 2011 with 10% of gdp. in another two decades by 2030 going to be about 15% of gdp.

at the very substantial, tripling of the size of the spending over a 50 year period. the entire budget is consumed by entitlement programs. it's already putting pressure on the fiscal policy today, put much more pressure to decades from now. it's imperative for our country, economy and federal budget that we address blu-ray but costs down. that's critical. that's what we should be talking about. >> host: margarita, sweetwater, texas, republican collar. >> caller: yes, i keep hearing that we're going off the fiscal close. as the 65-year-old texan, i don't understand why they want to cut programs from us and

they're sending money to countries that don't do nothing for us. if i could do but eat hundreds of dollars a month, i'm getting $900 increasing january. these people in washington get hundreds and hundreds of dollars. why not take a cut in pay? why not give countries all that money. then we can budget were going to spend. >> host: okay, margarita, isabel sawhill. that's a call we get a law. >> guest: we do hear this question a lot. what we need to understand that the events of money we spend on for aid is tiny. we could eliminate it entirely into adulthood make the slightest of mixing the problem. just a tiny dent, not nearly

enough. similarly, we could totally eliminate any raises for federal workers. we could even cut their pay and again, the effects to be tiny. so this is fine to talk about, it doesn't solve the problem because it's just a drop in the ocean. >> host: sharon, massachusetts, democratic collar. >> caller: the woman that was just talking i kind of disagree with her as far as a drop in the bucket when you look at curbing government pay. when you guys talk about the areas they get cut, military spending, discretionary spending and entitlement, what i want to hear in addition to that is government waste and fraud. when you talk about entitlement come you hear people argue about public waste and fraud.

in government waste and fraud, isabella referred to it as instances. the gsa was an instance of a great deal of money being inappropriately spent? senator coburn has come out and talked about redundancy and programs, senators and congressmen not looking back to see if they're actually working for nonperforming programs. >> host: let's get a response. we'll have jim weigh in as well. just go once again come i can't emphasize enough and very much in favor of eliminating fraud and waste in an efficiency. it's hard to do. i don't agree with you we are not doing -- we are not doing it already. i don't agree with you it would save a huge amount of money. in terms of getting rid of us

affected programs or reforming once again, i'm in favor of that as well. there's some programmatic spending that should be eliminated or per caleb. when i was in the clinton administration and in charge of the social programs of the federal government, either wonderful staff, all civil servants, highly trained, highly competent. i would not have wanted to pay them less. they were doing the work you seem to want to have done, which is to scrutinize all of these programs to put pressure on the agencies to cut those that are working into fair at all of the inefficiencies as well. i think genocide probably had similar experiences. >> guest: very much so. the federal government does try to root out waste and r